Tennessee Realtor State Practice Exam

What responsibility does a retail property manager have?

1. Setting loan terms

2. Establishing leases as percentage leases

3. Managing residential properties only

4. Negotiating purchase agreements

The correct answer is: Establishing leases as percentage leases

A retail property manager is primarily responsible for overseeing and managing retail properties, and one of the key aspects of this role is establishing leases as percentage leases. Percentage leases are common in retail settings, where the rent paid by the tenant is based on a percentage of their sales revenue, in addition to a base rent. This arrangement aligns the interests of both the landlord and the tenant, as it allows the landlord to benefit from the tenant's business success while providing the tenant with potentially lower fixed costs during slower sales periods. While the other options may involve various aspects of real estate management or investment, they do not accurately reflect the specific responsibilities of a retail property manager. Setting loan terms relates more to financial institutions or loan officers rather than property management. Managing residential properties is outside the scope of retail property management, and negotiating purchase agreements typically pertains to buying real estate rather than managing it. Therefore, establishing leases as percentage leases is indeed a significant responsibility of a retail property manager.